Which of the Following Illustrates Elastic Demand

question 93

Multiple Choice

Which of the following illustrates elastic demand?

• A) A 10 percent increase in price causes a 5 percent decrease in quantity demanded.
• B) A 10 percent increase in price causes a 10 percent reduction in quantity demanded.
• C) A 10 percent increase in price causes a 20 percent decrease in quantity demanded.
• D) a price elasticity of 0.8
• E) a price elasticity of 1.0

---

Definitions:

Consumer Surplus

The economic benefit consumers receive when they pay a price below what they were willing to pay, reflecting consumer satisfaction in economic transactions.

Consumer Surplus

The disparity between the ideal payment consumers are ready to make for a good or service and the real amount paid.

Total Expenditure

The overall amount of money spent by individuals, households, or an economy on goods and services over a specific period of time.

Snob Effect

Negative network externality in which a consumer wishes to own an exclusive or unique good.